S&P500 Short Term Market Breadth Analog Forecast Starting May 18, 2015

By Lawrence

Review of Forecast for May 11, 2015


The expectation of 1.5% or more upside was interrupted by price shock early in the week. Yet S&P held up fine at previous week midpoint and indeed started a rally of near 2%. The breadth analog model did not anticipated the shock so it was not helping last week.

Forecast Starting May 18, 2015


Summary of the S&P500 short-term forecast based on my proprietary market breadth analog model as of the close of May 15, 2015:
  • Limited upside of 1.5% with the potential of starting a significant decline
  • Once 1.5% down side has materialized, extending to 2.5% or more will be very likely

Report Snapshot


breadth_forecast_20150515

Short Explanation About The Model


My market breadth based analog model takes into account the short term volatility, daily market breadth readings and a few other intraday breadth data to identify the current market conditions. Using the information, the model then went through the historical data over the past 20 years to generate its statistical analysis. The model has been pretty good at identifying important swing tops and bottoms over the past few years by providing early warnings about potential volatility upticks.

For the technical explanation of the concept, you can read about it here, Market Breadth Primer: Market Breadth Analog Forecasting Method

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